Whole life insurance is a type of insurance which is designed to last as long as you do.
All you have to do is to pay in a premium every month and when you die, the policy will pay out a lump sum to your family.
Some people are confused between whole-of-life insurance and the term one. The main difference between them is that the term insurance only runs for a set period. You select how long you want the term of the policy to last when you get a quote, for example ten years with term insurance. If you die in that time, it will pay a tax-free cash lump sum to your loved ones. On the contrary, if you live beyond the term, you may not get any profit. Because term insurance is much cheaper than the whole life one, many people pick it instead of whole-of-life insurance.
There are few things you need to watch out for when purchasing a whole of life policy. Many insurers guarantee that they will not increase your premiums in the first ten years of the policy. You should make sure you comprehend how this guarantee works.
The final information you need to acquire is about what will affect your premiums. How much you pay also depends on the sum insured, your age, health, and how much you drink or smoke. It means that the higher the risk is, the higher the premium you need to pay. You can take out a plan for one or two people, although it will only pay out once, on the death of the first person. Some of your plans should include sickness or disability benefits as well.
Last but not least, with some plans, if you keep paying in until you die, it can be expensive in case you live to more than one hundred years old. There are others which payments stop once you reach a set age, even though cover continues until you die.